Saudi Petrochemicals - NCBC

INDUSTRY FINANCIALS1Q 2010 financial performanceThe recently reported 1Q 2010 earnings came in very strong across the sixcompanies in this report when compared on a QoQ and a YoY basis. In 1Q 2009total net income for the six companies in this report came out as a loss ofSR33.3mn and improved substantially to SR742.2mn in 1Q 2010. Total operatingincome for 1Q 2009 stood at SR4mn while 1Q 2010 stood at SR1,293.8mn.Overall improvement was driven by significant increases in petrochemical prices.On a YoY basis, ethylene prices have increased 97%, while polyethylene priceswitnessed growth of 56.7%. Similarly, propylene and polypropylene pricesincreased by 135.8% and 46.4% respectively.TASNEEHigher petrochemical prices positively impacted Tasnee’s 1Q 2010 results alongwith the SEPC production. The net loss of SR26mn in 1Q 2009 was due to amaintenance shutdown in the SPC plant and additional expense related to the SEPCexpansion.SIPCHEMHigher petrochemical prices positively impacted Sipchem’s 1Q 2010 results. Netincome improved 178% YoY and 43.7% QoQ. The average prices of Methanol(accounting for 94% of Sipchems production) during 1Q10 stood at USD313/mt,62% higher than that of USD193/mt in 1Q09YANSABThe start of commercial operations at the petrochemical complex positivelyimpacted its 1Q 2010 results as it was the first quarter for Yansab to haverevenues. Yansab reported net income of SR259mn for 1Q 2010 versus a net lossof SR8.2mn for 1Q 2009.SAHARAThe operating loss in 1Q 2010 is due to the pre-operational status of the Al Wahaplant as it is still in trial runs. The reason behind the rise in its net income wasprimarily due to the income from the SPEC plant (which falls under ‘investmentfrom associates’ in the income statement).PETROCHEMThe plants are in currently in pre-operational stage and under construction whichare the primary reasons behind reporting losses in 1Q 2010 of SR43mn.SAUDI KAYANThe plants are in currently in pre-operational stage which is the primary reasonbehind reporting losses in 1Q 2010 of SR3.8mn. The company is still reporting zerooperating income.27 April 2010 SAUDI PETROCHEMICAL SECTOR23